RBC CANADIAN BANKING MARKETSMART GIC - INVESTING RBC MARKETSMARTTM GICS
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Investing
RBC MarketSmartTM GICs
RBC Canadian Banking
®
MarketSmart GIC
Ensure that your investment
is guaranteed to grow:
get a guaranteed minimum
return, plus the potential for
a higher return based on the
stock market’s performance.
The RBC Canadian Banking How returns are calculated index increases, you will get a higher
MarketSmart GIC delivers the best of Unlike traditional GICs that guarantee a rate of return, up to the maximum rate
both worlds — the security of a GIC with specific rate of return, the RBC Canadian set out at the time of purchase.
a guaranteed minimum return and the Banking MarketSmart GIC’s return is I ndex Settlement Level (ISL): The
potential for a higher return tied to the variable and depends on how much the closing level for the S&P/TSX Banks
performance of a Canadian Banking Canadian Banking index increases over Index for the business day preceding
equity index. This is ideal if you need the the 2-, 3- or 5-year term of the GIC. The the maturity date.
growth potential of equity but want to index used to calculate returns for the I ndex Base Level (IBL): The closing
preserve your principal. RBC Canadian Banking MarketSmart index value on the first business day
GIC is the S&P‡/TSX‡ Banks Index.† after the GIC issue date.
Is this GIC right for you?
This GIC may be an appropriate choice You will always receive 100% of your The formula used to calculate your
if you: principal as well as the guaranteed variable return is the percentage change
minimum return. However, the additional in the level of the S&P/TSX Banks Index.
✔W
ant a guaranteed minimum return
return is calculated on the day the GIC
with the potential for a higher rate
comes due and is based on three factors: Formula:
of return
✔ Want
peace of mind knowing you’ll M
inimum and Maximum Returns: Variable Return = (ISL – IBL)
get 100% of your principal as well as With the RBC Canadian Banking IBL
at least the guaranteed minimum MarketSmart GIC, you are always To calculate your variable return payment, multiply
guaranteed to receive at least the the principal by the variable return. If the variable
✔ W
ant the simplicity of principal return is below the minimum return, adjust it
protection and growth in one solution minimum return. This means that even upwards to the minimum return set out at the
if the markets perform poorly, you time of purchase. If the variable return is above
✔W
ill not need regular income the maximum return, adjust it downwards to the
still receive the guaranteed minimum maximum return set at the time of purchase.
from this investment
return. If the markets perform well
and the underlying Canadian Banking
RBC MarketSmart™ GIC 2
Charting out return scenarios
To get a better idea of how it works, let’s take a look at some return scenarios. For example, let’s assume you purchase a 5-year RBC
Canadian Banking MarketSmart GIC and, at the time of purchase, the minimum return is set at 5% and the maximum return is set at
25%.
Depending on the growth of the underlying index over the 5-year term, there are three possible scenarios: the market is up, the
market is down or the market is way up.
MARKET IS UP
Return
(%)
If the underlying index moves from 100 to
120 over the 5-year term of the GIC, this Maximum Return – 25%
would indicate an increase of 20% in the
120
index. In this scenario the increase is above Return is 20%
the minimum and below the maximum. You
Minimum Return – 5%
would receive 100% of your principal plus a 100
20% return on your investment.
Time of Maturity
Purchase
MARKET IS DOWN
Return
(%)
If the underlying index moves from 100 to 80 Maximum Return – 25%
over the 5-year term of the GIC, you would,
in this scenario, receive 100% of your
principal plus the 5% guaranteed minimum
Minimum Return – 5%
return set out at the time of purchase.
100
80
Return is 5%
Time of Maturity
Purchase
MARKET IS WAY UP
Return
(%)
135
If the underlying index moves from 100 to Return is 25%
135 over the 5-year term of the GIC, this
Maximum Return – 25%
would indicate an increase of 35% in the
index. In this scenario, since the increase
is above the maximum, you would receive
Minimum Return – 5%
100% of your principal plus the 25%
100
maximum return set out at the time of
purchase.
Time of Maturity
Purchase
RBC MarketSmart™ GIC 3
Before you invest … the right to receive any dividends notifying us within two days of receipt
As with any investment choice, it’s or distributions. The return on your of the Fact Sheet and confirmation.
important that you make a fully informed GIC will not be identical to the return F
or each year you hold your RBC
decision. With the RBC Canadian associated with the index. Canadian Banking MarketSmart GIC,
Banking MarketSmart GIC, you should W
e determine the Variable Return and you will receive a T5 slip (Relevé 3
be aware of the following: may exercise judgment and discretion in Quebec) based on the minimum
P
ast performance of the S&P/TSX in calculating it. Our calculations and return at the time of purchase. In the
Banks Index is not indicative of determinations will be final. Potential final calendar year that includes the
future returns. conflicts between the interests of the Maturity Date of your RBC Canadian
depositors and the interests of RBC Banking MarketSmart GIC, you will
I nvesting in this type of GIC is not
may arise. receive a tax slip reflecting the return
the same as investing directly in
Any RBC Canadian Banking paid for the term, minus the interest
the stocks of the S&P/TSX Banks
MarketSmart GIC deposit made income reported in previous years.
Index. For example, you won’t have
over the phone may be cancelled by
Highlights
Term 2-, 3- and 5-year terms (non-redeemable and non-transferable)
Minimum deposit $1,000
S&P/TSX Banks Index is a sub-sector index comprised of the major banks within the S&P/TSX Composite
Index. The individual constituents are:
Underlying investment Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Canadian Western Bank,
Genworth MI Canada Inc., Home Capital Group Inc., Laurentian Bank of Canada, National Bank of Canada,
Royal Bank of Canada, The Toronto-Dominion Bank
The variable return will be calculated using the formula displayed on the first page, adjusted to a minimum or
Variable return payment†
maximum return, if applicable, and will be paid at maturity.
Plan eligibility Available for RRSPs, TFSAs, RESPs, RDSPs, RRIFs and non-registered accounts
CDIC-eligible Yes
Staying in the know
The confirmations, regular statements and maturity notices we send out make it easy for you to keep track of your investments.
After purchasing your GIC, you can get its estimated current value by using the online RBC MarketSmart™ GIC Return
Calculator at rbc.com/marketsmart-calculator.
For more information or to invest in an RBC Canadian Banking MarketSmart GIC, visit your nearest RBC branch,
call 1-800-463-3863 or go online to www.rbcroyalbank.com/gic.
The RBC Canadian Banking MarketSmart GIC is offered by Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company.
® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada.
‡ All other trademarks are the property of their respective owner(s).
† The RBC Canadian Banking MarketSmart GIC is not sponsored, endorsed, sold or promoted by Standard & Poor’s (S&P) or the TSX, and
neither party makes any representation regarding the advisability of investing in the RBC Canadian Banking MarketSmart GIC.
VPS83633
103447 (10/2013)
E-FORM 300104 (11/2013)
CLIENT AGREEMENT - GUARANTEED INVESTMENT CERTIFICATE (GIC)
Special Conditions for
RBC U.S. MarketSmart GIC
RBC Canadian Banking MarketSmart GIC
RBC Canadian Utilities MarketSmart GIC
These Special Conditions supplement our Client Agreement - Guaranteed investment Certificate (the "Agreement") that you have
entered into with us and set out the terms under which you can purchase a RBC U.S. MarketSmart GIC, RBC Canadian Banking
MarketSmart GIC and/or RBC Canadian Utilities MarketSmart GIC(the "Deposit"). In case of conflict between these Special
Conditions and the Agreement, these Special Conditions will prevail.
1. What the Words Mean: In these Special Conditions:
When these Special Conditions refer to "you", they mean any person in whose name a Deposit is held. If you hold a Deposit with
others, it means each of those persons, individually and together. If a Deposit is held within a Royal Bank of Canada Retirement
Savings Plan, Retirement Income Fund, Education Savings Plan, Disability Savings Plan or Tax-Free Savings Account ("Registered
Plan"), then you are the annuitant, subscriber or holder of the plan, as may be applicable. When these Special Conditions refer to
"we", "our" and "us", they mean the Royal Bank of Canada (the Bank), if a Deposit is with the Bank and Royal Trust Corporation
of Canada, or in Quebec, The Royal Trust Company (Royal Trust), if a Deposit is with the Royal Trust.
"Business Day" means a day on which our main branch in Toronto, Ontario is open for business and, in respect of a particular
Equity Index, will only include a day (a) on which commercial banks are open for business in the city where the Sponsor for
that Equity Index is located, and (b) a day which is a trading day on the applicable Principal Exchange for that Equity Index,
other than a day on which any such principal exchange is scheduled to close or closes prior to its regular weekday closing
time;
+ + +
"Equity Index" means the S&P 500+ Index, the S&P/TSX+ Banks Index or the S&P/TSX+ Capped Utilities Sector Index, as the
case may be, depending on the Deposit, more fully described in section 2;
"Investment Date" means the Investment Date for a Deposit, as indicated on its certificate or confirmation notice we provide
to you;
"Maturity Date" means the Maturity Date for a Deposit, as indicated on its certificate or confirmation notice we provide to
you;
"Maximum Return" means the maximum return, expressed as a percentage rate per term, that we set for a Variable Return
on the Investment Date for a Deposit, as indicated on its certificate or confirmation notice we provide to you;
"Minimum Return" means the minimum return, expressed as a percentage rate per term, that we set for a Variable Return on
the Investment Date for a Deposit, as indicated on its certificate or confirmation notice we provide to you;
"Principal Exchange" means
(a) in respect of the S&P 500 Index, the New York Stock Exchange and the Nasdaq Stock Market;
(b) in respect of the S&P/TSX Banks Index, the Toronto Stock Exchange; and
(c) in respect of the S&P/TSX Capped Utilities Sector Index, the Toronto Stock Exchange;
+ +
+
"S&P+" means STANDARD & POORS ;
"S&P 500 Index" means the capitalization weighted index of a selection of five hundred (500) stocks known as the Standard
& Poor's 500 Index, as calculated and disseminated by Standard & Poor's from time to time in accordance with the rules
Standard & Poor's has established for this purpose;
"S&P/TSX Banks Index" means an index which includes Global Industry Classification Standard sub industry groups of
diversified banks, commercial banks whose businesses are derived primarily from commercial lending operations and retail
banking, regional banks, whose businesses are similar but who have limited geographic exposure and thrift and mortgage
finance companies, which include financial institutions that provide mortgage and mortgage related services. The parent
index for the S&P/TSX Banks index is the S&P/TSX Composite Index;
"S&P/TSX Capped Utilities Sector Index" means a modified capitalization-weighted index, whose equity weights are capped
at 25%. The index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. Sector
classification is based on the Global Industry Classification Standard. The base date is September 29, 2000 and has a base
of 100;E-FORM 300104 (11/2013)
"Special Circumstances" means the Special Circumstances more fully described in section 11 that could affect the Variable
Return;
"Sponsor" means Standard & Poor's;
"Variable Return" means, subject to any Special Circumstances that have occurred, the return earned on your Deposit as
calculated in section 3 of these Special Conditions and expressed as a percentage rate per term;
"Variable Return Payment" means the amount, expressed in dollars and cents, equal to the product obtained by multiplying
the principal amount of the Deposit by the Variable Return, the Minimum Return or the Maximum Return, as the case may
be;
The other words used in these Special Conditions have the same meaning we have given to them in the Agreement. You will
refer to the Agreement if needed when reading those words.
2. Deposit
If you have selected the RBC U.S. MarketSmart GIC, the Variable Return of your Deposit is determined by the S&P 500
Index.
If you have selected the RBC Canadian Banking MarketSmart GIC, the Variable Return of your Deposit is determined by the
S&P/TSX Banks Index.
If you have selected the RBC Canadian Utilities MarketSmart GIC, the Variable Return of your Deposit is determined by the
S&P/TSX Capped Utilities Sector Index.
3. Variable Return
We will calculate the Variable Return in accordance with the following formula and express it as a percentage rate per term.
In this calculation "Index Base Level" is the closing level for the Equity Index linked to your Deposit, on the Business Day
following the Investment Date and "Index Settlement Level" is the closing level for the Equity Index linked to your Deposit,
for the Business Day preceding the Maturity Date:
Variable Return = Index Settlement Level - Index Base Level
Index Base Level
If the Variable Return, calculated in accordance with the above formula, is below the Minimum Return, the Minimum Return
will be used to calculate the Variable Return Payment. If the Variable Return, calculated in accordance with the above
formula is above the Maximum Return, the Maximum Return will be used to calculate the Variable Return Payment;
4. Payments
(a) Principal: We will repay the principal and pay any Variable Return Payment earned on the principal, at the end of the
term, in accordance with these Special Conditions. For a Deposit held within a Registered Plan, all such transactions will
occur within your Registered Plan.
(b) Interest and Variable Return: We will not pay interest on a Deposit. Instead we will make a Variable Return Payment as
described in section 3 above, at the end of the term. Accordingly, the reference to interest or interest payment in the
Agreement will be adjusted to mean a Variable Return or Variable Return Payment, as applicable.
5. Registered Plan Redemptions
If this Deposit is held within a Registered Plan, we will redeem the Deposit in full and you will not receive any Variable Return
Payment if:
(a) you direct a payment or withdrawal of any kind from the Registered Plan or we are otherwise required by law to make a
payment ("Registered Plan Payment"), and
(b) there is not sufficient cash or other investments in the Registered Plan which we can redeem or sell to make the
Registered Plan Payment in full without using part or all of this Deposit.
It is your responsibility to give instructions and to make certain there is sufficient cash in the Registered Plan to make a
Registered Plan Payment in full. If you fail to do so, you understand we may redeem the Deposit in full since we will not
process partial redemptions if a Registered Plan Payment must be made from the Deposit. We will invest any funds remaining
from the redeemed Deposit into a savings deposit within the Registered Plan.E-FORM 300104 (11/2013)
6. Redemptions
If a Deposit is held outside a Registered Plan, there may be instances where we will be required by law to make a payment,
such as to a judgment creditor. You understand we may redeem the Deposit in full since we will not process partial
redemptions, which will result in no Variable Return or Variable Return Payment for the entire time you held the Deposit. We
will invest any funds remaining from the redeemed Deposit in a one year redeemable GIC at the then prevailing interest rate
and upon the terms and conditions applicable to such product at that time.
7. Renewal
If you do not provide us with instructions as to what to do with the principal of the Deposit and the Variable Return Payment
on the Maturity Date and this is a Deposit held outside a Registered Plan, we will automatically invest them both in a one
year redeemable GIC at the then prevailing interest rate and upon the terms and conditions applicable to such product at that
time. If this is a Deposit held within a Registered Plan, the principal and Variable Return Payment will be credited to a savings
deposit within the Registered Plan. Accordingly, all provisions of the Agreement relating to renewal are amended to the
extent necessary to adapt to the Special Conditions.
8. Tax Considerations
We understand the Deposit is a "prescribed debt obligation" within the meaning of the Income Tax Act (Canada) and Income
Tax Regulation 7000(1)(d). We also understand that the income tax rules that apply to the Deposit require a taxpayer to
accrue in each taxation year the maximum amount of any interest, bonus or premium receivable from the Deposit and in
respect of that year. Based on our understanding of the current administrative practice of the Canada Revenue Agency, only
an amount based on accruing the Minimum Return over the term and calculated on each Anniversary Day (as defined in the
Income Tax Act (Canada)) would be considered receivable for each year up to the final calendar year. We will report this
amount to you annually on a tax slip and you should include it in your income for the applicable taxation year. For the final
calendar year that includes the Maturity Date, you will receive a tax slip reflecting the Variable Return Payment amount less
the income amounts reported in previous years.
9. Disclosures
(a) Term: The term of the Deposit or the Maturity Date, as well as how and when the principal and Variable Return Payment
are to be paid are indicated on the certificate or confirmation notice.
(b) Fees: There are no fees or charges applicable to the Deposit.
(c) Variable Return: The method of calculating the Variable Return and any limitations in respect of the Variable Return
Payment are described herein.
(d) Risk Factors / Considerations: The following are some risks and considerations associated with the Deposit:
(i) If the Index Settlement Level is less than the Index Base Level on the Maturity Date, the Minimum Return will be
used to calculate the Variable Return Payment;
(ii) If the Index Settlement Level is greater than the Index Base Level and exceeds the Maximum Return on the Maturity
Date, the Maximum Return will be used to calculate the Variable Return Payment;
(iii) The Variable Return will depend upon the performance of the applicable Equity Index. No assurance may be given as
to how an Equity Index will perform;
(iv) If payments are required to be made as described in sections 5 and 6 above, you understand we may redeem the
Deposit in full since we will not process partial redemptions, which will result in no Variable Return Payment for the
entire time you held the Deposit and
(v) The Deposit is not equivalent to a direct investment in the securities of the Equity Index and the Deposit does not
entitle you to any interest in the securities of the Equity Index, including any right to receive dividend or distribution
payments. As such the Deposit is subject to different risks than a direct investment in the securities of the Equity
Index and any return payable will not be identical to the return associated with the securities of the Equity Index.
(e) Differences from a Fixed Rate Investment: This Deposit will not provide a guaranteed rate of return. The return on this
Deposit will depend on the performance of the applicable Equity Index.
(f) Suitability: This Deposit provides opportunities but may pose risks, which should be carefully considered. This Deposit is
designed for those who wish to earn a higher rate of return than traditional deposits, such as fixed rate guaranteed
investment certificates, and are willing to accept the risk of earning a minimal return but at the same time wish to have
their principal guaranteed. We make no representations as to the suitability of the Deposit for your investment purposes.
(g) No Redemption: A Deposit may not be redeemed until its Maturity Date.E-FORM 300104 (11/2013)
(h) No Secondary Market: This Deposit is not transferable. There shall not be any secondary market for this Deposit.
(i) Right of Cancellation: You may cancel any purchase of a Deposit made by electronic means or by telephone by notifying
us within 2 days of the earlier of actual receipt or deemed receipt of the written disclosures related to the Deposit. Upon
cancellation, you are entitled to a refund of the Deposit, but if the Deposit was held within a Registered Plan, the
Deposit will be credited to a savings deposit within the plan.
(j) Potential Conflict of Interest: We will be responsible in most cases for determining the Variable Return and may exercise
judgment and discretion in relation to the calculations and determinations undertaken in respect of the Variable Return.
Our calculations and determinations will (absent manifest error) be final and binding on you. Consequently, potential
conflicts between the interests of the depositors and our interests may arise.
(k) Restrictions on Sale: This Deposit may only be sold in Canada and to Canadian residents. It is subject to all other
restrictions on sale that may apply under federal or provincial laws.
10. Availability of Information
(a) The information contained in section 9 (Disclosures) above may be obtained on our public website at rbc.com and a
paper copy available upon request by visiting our branches or by calling toll free at 1 800 769- 2511;
(b) If you wish to obtain an indication of the current value of your Deposit at any time, you may do so by visiting our
branches, by calling 1 800 769-2511 or by using our RBC MarketSmart TM GIC Return Calculator, on the GIC page of our
public website at rbc.com. Note the actual return on your Deposit may only be determined on the Maturity Date.
11. Special Circumstances
(a) Extraordinary Events: You understand and agree that there is the possibility of the occurrence of a market disruption or
other event beyond our reasonable control which has or will have a material adverse effect on our ability to calculate the
Variable Return, to manage the related risk, or to otherwise perform our obligations under these Special Conditions. If such
an event occurs, we may, acting reasonably, take such action as we deem necessary, including (without limitation)
adjusting, advancing or delaying the calculation or payment of any Variable Return;
(b) Discontinuation or Modification of an Equity Index: If, for any reason, the Sponsor ceases to calculate or publish an
Equity Index or materially changes the numerical form of (or the method of calculating) an Equity Index, we may determine
the Variable Return as we deem appropriate, including consulting independent calculation experts to make any necessary
calculations they deem appropriate.
12. Sponsor and Equity Index Disclaimers:
The Deposit is not sponsored, endorsed, sold or promoted by any Sponsor or their third party licensors. Neither the Sponsors,
nor their third party licensors, make any representation or warranty, express or implied, to you or any member of the public
regarding the advisability of investing in securities generally or in the Deposit particularly, or the ability of the Equity Index to
assess or track general stock market performance or any other economic factor. The Sponsor's and their third party
licensors’ only relationship to us is the licensing (or sub-licensing) of certain trade-marks and trade names of the Sponsor,
their third party licensors and the Equity Index which is determined, composed and calculated by the Sponsor or their third
party licensors without regard to us or the Deposit. The Sponsor and their third party licensors have no obligation to take our
needs into consideration in determining, composing or calculating the Index. Neither the Sponsor nor any third party licensor
is responsible for and has not participated in the determination or calculation of the Variable Return or the Variable Return
Payment. The Sponsor has no obligation or liability in connection with the marketing, trading or administration of the Deposit.
NEITHER THE SPONSORS, NOR ITS AFFILIATES, NOR THEIR THIRD PARTY LICENSORS, GUARANTEE THE ADEQUACY,
ACCURACY, TIMELINESS OR COMPLETENESS OF ANY EQUITY INDEX OR ANY DATA INCLUDED THEREIN OR ANY
COMMUNICATIONS, INCLUDING BUT NOT LIMITED TO ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC
COMMUNICATIONS) WITH RESPECT THERETO. THE SPONSOR, ITS AFFILIATES AND THEIR THIRD PARTY LICENSORS SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS OMISSIONS OR DELAYS THEREIN. THE SPONSOR
MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHATABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MARKS, THE INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL THE SPONSOR, ITS AFFILIATES
OR THEIR THIRD PARTY LICENSORS BE LIABLE FOR ANY INDIRECT, SPECIAL INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF
THEY HAVE BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR
OTHERWISE.
TM
Trademark of Royal Bank of Canada.
® Registered trademark of Royal Bank of Canada
+
+ All other trademarks are the property of their respective owner(s).
+ + +
Standard & Poor’s+, S&P+(alone and as part of the composite mark of S&P/TSX) and S&P 500+are registered trademarks of Standard & Poor’s Financial Services
+
LLC ("S&P") and have been licensed for use by the Royal Bank of Canada. TSX+is a trademark of TSX Inc. and has been licensed for use by Royal Bank of
Canada.You can also read
